SATR: topped trading, payments on account and Capital Gains

[bcontractor]

Hi there!

I've asked my accountant, but while I wait for an answer, I'd like to get your views.

I stopped trading in April last year, I started permanent employment back then and I am going to be liquidating my company imminently.

For 2020/21:

• Most of my tax are and will be paid via PAYE
• There'll be some rental income
• There'll be some CG following liquidation

How will my payments on account coming off the 2020/21 SATR work? Should they be an estimate based on the above?

[Lance]

Hi there!

I've asked my accountant, but while I wait for an answer, I'd like to get your views.

I stopped trading in April last year, I started permanent employment back then and I am going to be liquidating my company imminently.

For 2020/21:

• Most of my tax are and will be paid via PAYE
• There'll be some rental income
• There'll be some CG following liquidation

How will my payments on account coming off the 2020/21 SATR work? Should they be an estimate based on the above?

POA will work as they always do. Estimated to be the same as the previous year. If they're going to be a lot lower you just apply for it to be reduced.

[bcontractor]

POA will work as they always do. Estimated to be the same as the previous year. If they're going to be a lot lower you just apply for it to be reduced.

Thank you. Would the application based on, basically, on an estimate of rental income + CG?

[Lance]

Thank you. Would the application based on, basically, on an estimate of rental income + CG?

I’ve no rental income or had any major capital distributions so not sure.

[malvolio]

There's a form to do this somewhere on the HMRC website. Basically you make a case for why your PoA should be reduced to whatever level you think is right (including zero). If at tax year end it transpires you should have made a payment you will have to pay the deferred amount plus interest. So in he absence of a real accountant, perhaps ask for it to be dropped to 20% of your estimated earnings for the tax year and see what happens.

[Craig@Clarity]

Hi there!

I've asked my accountant, but while I wait for an answer, I'd like to get your views.

I stopped trading in April last year, I started permanent employment back then and I am going to be liquidating my company imminently.

For 2020/21:

• Most of my tax are and will be paid via PAYE
• There'll be some rental income
• There'll be some CG following liquidation

How will my payments on account coming off the 2020/21 SATR work? Should they be an estimate based on the above?

Short answer is yes. Calculate the tax due on the above for this tax year. Divide it by 2 and round it up conservatively to cover any shortfall. Then go on HMRC online and simply punch in the reduced payment on account figure on their website and that's it.

Having a rental property, you'll know that you don't get a deduction for mortgage interest as an expense when working out your rental profit but rather a tax relief of 20% of the mortgage interest right?